Affordable housing according to the government is defined as affordable rented, social rented and intermediate housing granted to specific eligible families with needs that cannot be met by the housing market. There are three interlocking reasons why affordable housing is needed in the United Kingdom: over the past 20 years, the UK’s population growth has experienced tremendous increase, significant lows have been recorded for housebuilding numbers in the same period, and house rents and house prices, especially in London, the South East and South West have risen considerably.
A recognised Housing Affordability Index can measure, using country, state (province), municipality or region, the kind of housing which is deemed affordable to those earning a middle level household income.
In certain countries, the market has failed to meet the ever increasing demand to provide housing stock at affordable prices. The supply of affordable housing has failed to meet its demand by low and middle income earners.
There was an unprecedented set of changes and pressures that the British housing market faced in the early 1990s. The crises offset a combination of circumstances such as changes in demography, in income distribution, housing supply and tenure and financial deregulation.
Affordability of houses then became a noteworthy policy topic when its influence on owner-controlled market became severe and feedback on macro-economic conditions stated to be perceived as serious. Many of the specific policy changes in this period revolved around the lack of ability of people to afford housing. They were either would-be buyers that got priced out of the boom, recent buyers who lost their homes through defaulting on mortgages or tenants who were affected by increased rent.
In 2013, the Bureau of Investigative Journalism in an investigation found that the UK spent £1.88bn (which could build 72,000 homes in London) on the rent of temporary accommodation in 12 of Britain’s biggest cities over the previous four years.
The Shared Home Ownership is the only scheme of its kind available in Australia. Western Australians can buy their own home with help from the Department of Housing with a Shared Start loan via Keystart, the Governments lending provider. With co-ownership, the initial price of buying a home is lowered, as the Department holds back up to 30% of the house. The share of the Department depends on borrowing capacity, household size, and the location and type of property. In the future, the buyer may have the choice to purchase the full amount or sell the property back to the Department. With a ShareStart loan newly built homes and off-the–plan properties offered by the Department of Housing can be purchased.
The local authority provides land for the building of new houses under the affordable housing scheme. To qualify for affordable housing scheme, certain conditions need to be met such as:
Under the affordable housing scheme, all applicants need to have enough income to meet up with mortgage payments after other bills have been paid. Certain local authorities have reduced or increased income limits than others.
Approximate income limits for affordable housing scheme is categorised as:
Single-income household: eligible applicants need to show gross income (before tax) in the last income tax year as between €25,000 and €58,000.
Two-income household: eligible applicants need to show joint income as €75,000 or less.
The affordable housing initiative provides the opportunity for people to buy an affordable house when 35% of income earned is insufficient to purchase a house.
AHI (Affordable House Initiative) was introduced as a part of the Sustaining Progress agreement. The Office of Public Works provides lands under this initiative for the building of houses to be sold. The goal of the initiative was to meet the needs of people who formerly could afford to purchase a house but as a result of the market prices are unable to do so.
Part V of the Development Acts 2000-2002 permits a local authority to demand that its developers set aside 20% of new developments for five or more houses to be used for affordable housing. The local authority reserves the right to decide if and how much of the percentage will be social, voluntary or affordable housing. There are no stipulated rules about the location of affordable houses in new developments. The local authorities had to decide the appropriate designations for the homes.
Under part v of the planning and development acts 2000-2002, a person was eligible to purchase an affordable house if 35% of income could not be sufficient to purchase a house.
Local authorities and banks provide mortgages for affordable homes. The loans offered could about to 97% of the house price, and expected repayments of less than 35% of the household’s net income after tax and social insurance (PRSI). Certain private lenders also offered affordable housing mortgages. Applicants interested in affordable mortgages provided by the private sector had to be approved beforehand by their local authorities for an appropriate property.
A person with a gross household income less than £24,000 who successfully acquired a mortgage for an affordable home from a local authority would be entitled to a subsidy of between £900 and £2200 per year, which would be paid directly to the local authority.
When a household cannot qualify for this subsidy, the Mortgage Allowance Scheme could be qualified for instead.